In the movie, Pirates of the Caribbean, The Curse of the Black Pearl, the main character, Jack Sparrow, was asked by a Royal Marine what his purpose was for being in Port Royal, to which Sparrow truthfully responded, “I confess, it is my intention to commandeer one of these ships, pick up a crew in Tortuga, raid, pillage, plunder and otherwise pilfer my weasely black guts out.”
In the real world, determining a person’s intention to commit theft/fraud isn’t usually that easy. In fact, when fraud is committed, activities usually go on for a long time (an average of 24 months, according to the Association of Fraud Examiners).
Take for example a news report about a former Kentucky county official who was indicted on two felony charges alleging that he misappropriated about $25,000 over two years while in office. The former official used funds from a drug investigation account for other purposes, used a county credit card for personal purchases and filed requests to be reimbursed for expenses that the county had already paid. The personal expenses ranged from food and alcohol to a subscription to a dating website.
According to the report, the accused said while under oath, “Basically, I lost track of things and misappropriated it.”
The news report never states how authorities figured it out, but in UKIA’s experience, it’s usually about documentation, or lack thereof. In fact, when purchase and travel request forms are used consistently and require the business purpose to be stated, the risk of misappropriation of funds occurring is greatly reduced. Although fraud is rare, documentation errors do occur, and both can be costly as a result of inappropriate and inaccurate reimbursements. Requiring purchase and travel forms to be completed that outline the business purpose for each request discourages such occurrences while also making it easier for faculty and staff to track and separate personal and business expenses. In turn, these best practices ultimately help to monitor and validate expenses.
Want to know more about how UKIA can help you locate gaps in your processes that leave an opening for inappropriate activities? Let us help you improve your operations BEFORE something happens. Call us at 257-3126, or check out UKIA’s services here. OR, if you just need some tools or training to make what you already have in place more efficient and effective, the UK Purchasing Division offers a number of resources here.